Dixon on Business Sunday

[QFinsider]

Anyone see the drivel rolled out and passing as an interview?

Not one difficult question, I guess it helps that lil Jamie is on the board.

When asked about the outsourcing of maintenance he simply stated (paraphrasing)"our people have done well but..."

The engineering standard at Qf is second to none. Sometimes you get what you pay for....He then went on about the offshore option for longhaul maintenance, squirming when the prospect of short haul maintenance being sent offshore stating "there are no plans for short haul" Wonder how many times we have heard that from the pathetic liar?????:mad:

The saddest bit was he intends to stay past 2008....I had thought the continued divisiness infesting flying operations may pass into history...

The reality for Geoff and the bean counters is that they cannot fly or fix em. They actually need us. If only we realised that and held the line instead of folding everytime Dixon uses his famous one two divide and conquer routine....It is so obvious:mad:

[chockchucker]

Well, the full interview transcript certainly makes for interesting reading.


One thing's for sure, major changes are afoot. Widebody certainly has the spotlight on them right now, and whilst the CEO's comments may be reassuring to the guys working at Tulla, it's only a matter of time before they get to the narrowbody maintenance as well.


I figure that the guys in Sydney will probably cop in in the neck first and hardest. What becomes of Brisbane and Avalon is anybody's guess. However, I get the impression that we're going to be working a lot more for a lot less in order to maintain jobs in Australia.


Sad that nowadays, if anybody leaving school were to ask me my thoughts on a career in RPT aircraft maintenance, I'd have to tell them to give it a wide birth. Unless you're prepared to put up with no job security and an ever decreasing income in real terms.

[peuce]

Could he be just foxing around and using the threat to take maintenance offshore as negotiating amunition for getting the Government to restrain competition on the Trans Pacific route? You know ... "look, things are very tough and if you open competion across the Pacific it will be the straw that breaks the camel's back ... and we'll just have to seek more cost effective options overseas ... "

[swh]

There is a backlog of 744 pax to BCF conversions to be done.

If QF is giving these guys too much trouble, why dont they look at doing these BCFs down in Avalon or Syd if the quality of work is so good.

I am figuring another agenda is at play. My nose says the land these hangers are on are worth more being something apart from hangers. Nothing to back this up, just the trends elsewhere and the proximity to the terminal.

[Bad Adventures]

Interview with Geoff Dixon. Business Sunday Program 19/2/06

ALI MOORE: A nosedive for Qantas's profit this week, dragged down by a crippling increase in fuel prices, something no airline can avoid. But the ten percent drop in first half results, to $353 million dollars, wasn't the only thing the carrier announced. It's restructured its management and put workers on notice there's likely to be more job losses, with much talk about moving long haul maintenance overseas. It's a challenging time for the airline, and to discuss these issues, Qantas boss Geoff Dixon joins me now live in the studio.







MOORE: Good morning, Mr Dixon.

GEOFF DIXON, CEO, QANTAS: Good morning.

MOORE: Let's start with fuel. Certainly there's been a bit of a drop recently but it's made a big dent in profits. The forward curve is still looking high on the price front. Are we heading for another increase in the fuel levy?

DIXON: No, I don't think so at all. We are trying to do is make sure the company is able to manage at about a US$60 a barrel price. That is the challenge we have got ahead of us, I suppose.

MOORE: Indeed on the hedging front you're 100 percent hedged to the end of the financial year and … it falls to 25 percent.

DIXON: Yes, it does. But you have to remember that hedging doesn't cover everything. In the first half we had a $690 million increase in the hedging covered around about $215 million so there is still a big gap.

MOORE: But 25 percent for next financial year. You would like to see that up?

DIXON: Only if it is at the right price. I mean, to say if we can't do it — I mean we have it under US$60 a barrel now and the price has come down a little bit. But it is really a volatile situation. As I said, we have to make sure over the next two to 2.5 years to ensure the company can continue to be very viable, make good profits, grow its employment base, invest, at a fuel price that will be much higher than it has been over preceding years.

MOORE: In that context it has been maintenance that has been in the spotlight. You said that you're 20 percent below best practice. Is that both long haul and short-haul maintenance?

DIXON: Oh yes, look what happens here, that our people in the maintenance area have done a tremendous job. We have a lot six thousand nine hundred people in that area. But the ground keeps changing as it is in most of the rest of the industry as well. So, they have done a terrific job but we are around about 15 percent to 20 percent below what is happening around the rest of the world. That is mainly because of scale and movement to much lower cost operations in other countries.

MOORE: So how do you fix that? How do you fix that and keep things in Australia?

DIXON: Restructuring and we will be talking to our people about that. They have come to the party before and have restructured with us. I think our record speaks for itself. There is 7,000 more jobs in Qantas today than there was six years ago. So we're not a slash and burn company. We're not putting people off willy-nilly but we are restructuring and moving jobs around to where they are more needed. We hope they can restructure with us. If not and if other things take over which often does in this industry, we will have to do other things.

MOORE: And other things obviously would mean overseas. Could you send short-haul to Indonesia and long haul to China? Is it possible both…

DIXON: No. There is no suggestion we are looking at the moment at our short-haul maintenance operations. We are looking at our long haul, our wide body maintenance operations which are 747s principally and 767s. That is the issue that is being looked at now — whether we just leave it as it is, which I don’t think is an option, whether we restructure within Australia, and that is an option, or whether we go offshore, which obviously is an option as well.

MOORE: How many people is that if it is offshore?

DIXON: If it is offshore, it will be about 2,500 people.

MOORE: And if you restructure in Australia, it will be green fields? You’ve got to start all over again?

DIXON: No, we have some very good operations throughout Australia but it does mean a change in certain work practices and more investment for Qantas, which is a major issue for us as well. I mean to say we just invested $18 billion in new aircraft on top of another $12 billion that we did in 2000. So, and we managed to meet all our commitments I might add. But it does mean additional investment, if it is additional investment we have got to be very careful and very sure that we can get the restructuring for that investment.

MOORE: Even if you do keep it in Australia, is there going to be job losses anyway? 20% is a huge gap to make up.

DIXON: Yes, there will be. That is inevitable, but I repeat — and it is very important — where we have job losses in some areas we have got a record of putting jobs on in other areas. I mean we are investing huge amounts of money, and we are growing the airline. The airline is 60 percent bigger than it was five years ago. So our track record is there. There will be job losses, and occasionally I would love everybody to say ‘gee look at Qantas, a headline that says they increased jobs by 7,000, not that they took 200 jobs out. I feel for the people who lose their jobs, but we are still also creating I believe, a very viable business.

MOORE: As well as job creation the other point that you do like to make is that 90 percent of Qantas's staff are actually in Australia at the moment, which is rare for an international global airline. In five years time, will it still be 90 percent?

DIXON: Let me tell you something else, there is 99 percent of our engineering operations are in Australia despite the fact we still do get engineering done offshore and have for many years, and people should realize that. I hope that it is still around about 90 percent,yes I would prefer that.

MOORE: Well, if you have upset the unions this week you have certainly upset the Singaporians. They think you have got double standards.

DIXON: This is the airline industry, everybody has got double standards, and they should not be saying that because I think they are in the same boat as we are, or the same aircraft.

MOORE: You are probably just a few weeks away from a government decision on whether or not Singapore Airlines will get access to that trans Pacific, the Sydney-LA route. What are you hearing from Warren Truss and co?

DIXON: They’ve given Margaret Jackson, myself, David Halls, who runs our government relations, we’ve spent all our time in Canberra, probably more than they would like us to. They've given us tremendous hearing. They know the situation, and all we are asking now is for a decision to give us some clarity. We need to know the policy settings that is being set for aviation in Australia over the next four or five years. When we know that we can make some of the other decisions. This is an industry like no other, and I know we always say that but I think most commentators now agree that is true. And what happens in Australia is not the same thing that happens in Singapore or not the same thing that happens in the UK. We are prevented from doing a lot of flying to a lot of places by regulatory regimes. Just give us the clarity and we will move on.

MOORE: Let's look at some of those other regimes. I guess you have said that new Jetstar joint ventures around the world are possible. Where, where are we talking — Indonesia?

DIXON: Yes we are talking about Indonesia.

MOORE: Would that be with Adam Air?

DIXON: No we have had discussions with Adam Air, there is no way that they've progressed to an extent that we would be making any decisions on it about we have very good meetings with them. They are a start-up carrier. They are very competent. It is a country with 250 million people close by. We are obviously interested in that. But we expect to have within the next four or five years at any rate — we have Jetstar Asia which is situated in Singapore. We have Jetstar in Australia. And we are going to start Jetstar to travel out of side Australia so we are putting a lot of dots together. Peter Greg is our CFO and he runs our strategy, is working on that. I think we have got some very, very good opportunities as we go forward.

MOORE: Lots of talk about Jetstar. Australian airlines — why keep it?

DIXON: Because it had done the job we want it to do. We need to consider all the options we have for flying. But we made it very, very plain last week that as we go forward the major investment and a major thrust of Qantas will be two flying brands — Qantas, which is one of the best in the world and continues to be and Jetstar, which has been a sensational success.

MOORE: You said this week that you would like to stay on at Qantas at the end of your contract. How long is long enough?

DIXON: I didn’t, how long is long enough? I think that depends on the board.

MOORE: But if you had your choice, another year? Another two years?

DIXON: Keep going.

MOORE: Another three years?

DIXON: No. Look, I don't know. My contract - and I don't like contracts like this, and I think Margaret and I have discussed this - it just creates a situation where people like you can say, "Look your contract is up in July."

MOORE: But you will be there in 08?

DIXON: I think I will be there for '08 but not just for the Beijing Olympics as someone said hopefully to do a bit of work as well.

MOORE: Geoff Dixon, thank you very much for talking to Business Sunday.

[Ronnie Honker]

I liked it when the haggard, old bloke (he looks like he's an octogenarian....must be the stress!) admitted to the lady interviewing him, that he probably does have "double standards" - "..but then don't most people who work in aviation?", was his next quip.

It was evident that his recurrent theme was "QANTAS is all about making a profit, regardless of where the maintenance is done, and in which country the staff reside.

"I still call Australia home"?
Not for much longer, methinks. The only Aussies working in Oz are going to be the fat cat management (who account for the biggest INCREASE in staff numbers, since Dixon took over the reins.)

[lambsie]

They'll need to change the theme song....

"I still call Jakarta, home." :hmm:

[domo]

not that they took 200 jobs out. I feel for the people who lose their jobs, but we are still also creating I believe, a very viable business.

interesting that he puts a specific figure on it

[Turbo 5B]

A greenfields site eh?
Sounds like Avvalon mK 2.
I wonder if there is some behind the scenes wheeling and dealing with the ALAEA exec over this suggestion.

[murgatroid]

Noticed that he couldn't but help himself, look down at Ali's cleavage!

[Turbo 5B]

Funny, that didn't show up in the transcript.

[Pass-A-Frozo]

Well I believe the point to lobby is this: If QANTAS will move jobs offshore they should not be protected on any route. The idea for the protection on a route to Australia is that it provides a benefit to Australia.

People should be saying in the media if QANTAS wish to move jobs offshore for "cost cutting" they should not be protecting in "profit making" by the government. In fact I think you'd find if the government said "If you start making "cost savings" offshore, you can start competing with companies "offshore". I think you'd find QANTAS retreating back to Australia.

I don't see a problem with an open market on all routes if all companies are on an even footing. A factor to consider is SIA though. How much gov't support do they receive??

If they do move offshore with jobs, I think it's fair enough to open all routes to all other free market operators.

[Keg]

A factor to consider is SIA though. How much gov't support do they receive??


Not much at all unless by 'support' you mean an advantageous tax regime, an aggressive foreign policy that supports companies that are mostly owned by the government, significantly different workers rights on hiring and firing (the ads in the Straits Times would make the legal stoush with DJ over hiring of young blonde F/As seem like a side show if it were Australia) and tight control of the press. :E

[Pass-A-Frozo]

Heard a report on Newsradio about it this morning.

They made mention of some report stating that QANTAS achieves "38% more revenue per kilometer" on the LA route compared to the London route. The report put it down to a "demonstrable lack of competition" .

(Edited to add news link)
Source: The Australian (http://finance.news.com.au/story/0,10166,18218874-462,00.html)

Qantas support 'will entrench high fares'
From: By Steve Creedy
February 21, 2006
A HOWARD Government decision to protect Qantas on US routes will entrench fares that are 38 per cent per kilometre higher than on the more competitive London flights, a Singapore-backed study has found.

The finding by Canberra consultancy Econtech came as Singapore Airlines made a final plea for "a fair go" ahead of the likely rejection today by cabinet of its bid to fly between Australia and the US.
While Qantas (qan.ASX:Quote,News) refused to respond to "speculative news reports" by admitting defeat, it warned that Australians would know who to blame for higher fares.

"If the Cabinet opts to continue an outdated legacy of protecting Qantas, consumers will continue to pay high fares and suffer a lack of service enhancements that competition would bring," said Singapore Airlines regional vice-president Paul Tan.

"And every consumer forced to pay high fares and suffer a lack of choice will understand that the decision was made entirely by the Australian Government."

The Econtech report to Singapore Airlines says there is strong evidence of a lack of effective competition on the trans-Pacific route compared with other international routes from Australia.

That evidence included Qantas's higher market share of 64 per cent and aircraft passenger loads of 79 per cent compared with 69 per cent on other routes.
It said modelling estimated the number of passengers travelling between Australia and the US would grow by between 4 per cent to 8 per cent if there was more competition, providing an additional $114 million a year to Australia's tourism industry.

"More competition on the direct Australia-US route would lead to a reduction in airfares on the route, greater flexibility in flight schedules and more choice in airlines for prospective passengers," the report says.

Although Qantas (qan.ASX:Quote,News) may have succeeded in keeping Singapore off its lucrative US patch, it is expected to be less successful with other items in its wish list.

Cabinet is expected to reject its aggressive push to lift its 49 per cent foreign investment limit, as well as its bid for faster aircraft depreciation.

The airline's foreign investment case has attracted stiff opposition from within its own workforce, with unions representing pilots and maintenance workers coming out against it.

The Australian and International Pilots Association warned that lifting the cap could result in a repeat of the Ansett collapse in the wake of its acquisition by Air New Zealand.

[rescue 1]

a major thrust of Qantas will be two flying brands — Qantas, which is one of the best in the world and continues to be and Jetstar, which has been a sensational success.


Sadly, I hear that the fold up plans, and "...anything else we can do with the skeletal business" for AO are now well established and underway.